s the most powerful luxury goods conglomerate in the world trying to snaffle Hermes? LVMH – Louis Vuitton Moët Hennessy, have announced that they’ve bought a 14.2% stake in Hermes and straight after, the share price of the jaunty French heritage brand rose steeply. Bernard Arnault, the founder, chairman, and CEO of LVMH has a rather aggressive attitude to acquiring brands to his stable of Louis Vuitton (obvs) Celine, Kenzo, Fendi, Givenchy, Marc Jacobs, Loewe and Donna Karan (and that’s just the fashion brands). He’s even been rumoured to want to buy up Gucci in the past. Hermes is still chiefly a family-run house, which has always resisted offers to sell in the past. Meanwhile, business analysts say Arnault will be playing a stealthy game and is unlikely to want to stop at such a minority share – so watch this space! Hermes is also mid-switch as Jean Paul Gaultier bowed out of his role as creative designer with a spectacular swansong involving lots of real horses on the catwalk and sportwear supremo Christophe Lemaire will be taking the reins “chuckles” this coming season.
Despite the recession, the luxury end of the market seems to be holding up very well, with shares in other super-posh brands up, including Brit flag flyer, Burberry. Healthy share prices mean big budgets, so it looks like we can look forward to more theatrical, zoological displays from the equestrian brand in the catwalk shows of the future.
But…Executives at French luxury group Hermes (HRMS.PA) called on larger rival LVMH (LVMH.PA) to withdraw from its capital, saying they saw the surprise purchase of a 17 percent stake last month as unfriendly. Patrick Thomas and Bertrand Puech told Le Figaro the family-owned company was united in its rejection of LVMH’s attempt to get involved in the group, known for its printed silk scarves and 4,000 euro ($5,577) crocodile handbags. “The family has clearly and unanimously said: If you want to be friendly, Mister Arnault, you need to withdraw,” Puech, a fifth-generation descendant of founder Thierry Hermes, was quoted as saying in the newspaper’s Wednesday edition.
He said it was unlikely that Bernard Arnault, head of world No. 1 luxury group LVMH, would one day control Hermes. Arnault’s arrival would not change the way Hermes runs its business and Hermes head Thomas said the group did not require any help or support, pointing out that the cultures of both groups diverged too much. “This culture (of craftsmanship and strong traditions) is hardly compatible with one of a big group. It is not a financial battle, it’s a cultural battle,” he said.
Meanwhile, the group will await the French market regulator’s decision on whether LVMH’s stake purchase happened legally. Arnault has said he does not plan to bid for Hermes. The family owns about 73 percent of Hermes’ share capital, and its partnership structure means no change in control can take place without family agreement. Its bylaws allow the company to use poison pills in the event of a hostile bid.
www.hermes.com
www.lvmh.com
